Innovation does not always mean having the freedom to commercialize a product.
Recently, I was advising a client in the pharmaceutical industry who approached us seeking guidance because he intended to commercialize a product whose active ingredient is one of the peptides that has become very popular in recent years for the treatment of type II diabetes. The conversation centered on whether it was necessary to conduct a patent search or whether, on the contrary, the most advisable approach for his particular case was to carry out a Freedom to Operate analysis (FTO). This interesting conversation motivated me to share the following notes, which, while not intended to exhaust this important topic, may serve as a starting point that can provide some guidance to those who, like my client, are seeking advice on the path to take before launching a product into the market.
It is important to understand that developing a novel technology, obtaining one’s own patent, or having a technically superior product does not guarantee that it can be manufactured, used, or commercialized without affecting third-party rights.
A company may have legitimately developed an innovation and may even have obtained a patent for it and, at the same time, still require authorization to exploit certain components protected by earlier patents. This apparent contradiction arises from a fundamental legal distinction: a patent confers a right to exclude, but not necessarily a positive right to exploit.
To identify and manage this risk, Freedom to Operate studies, internationally known as FTO analyses, are conducted.
What is a Freedom to Operate analysis?
An FTO is a technical and legal investigation aimed at determining whether the manufacture, use, importation, exportation, or commercialization of a product, process, or service could interfere with patents or other industrial property rights belonging to third parties.
The World Intellectual Property Organization (WIPO) explains that this analysis begins with a search for relevant granted patents and pending applications, followed by a legal assessment of whether the proposed activity could fall within their scope of protection.
Accordingly, an FTO does not simply consist of locating documents that describe similar technologies. Its legal core lies in analyzing the claims of the identified patents, determining their scope, verifying their legal status, and systematically comparing them with the characteristics of the product or process intended to be exploited.
An FTO is not the same as a patentability search. Although both investigations use patent databases, they pursue different objectives. A patentability search seeks to establish whether an invention meets the requirements of novelty and inventive step necessary to obtain protection. For this purpose, any prior disclosure may be relevant, regardless of whether the corresponding patent remains in force.
An FTO analysis, on the other hand, seeks to determine whether the proposed commercial exploitation could infringe enforceable third-party rights. Its attention is focused mainly on the claims of patents currently in force and on pending applications that could become enforceable rights within the territories of interest.
In simple terms:
A patentability search answers: Can we protect this invention?
An FTO analysis answers: Can we commercially exploit this solution without infringing third-party rights?
They are different and strategically complementary questions.
Why must the analysis be carried out by territory?
Patent rights are territorial in nature. A patent granted in the United States, for example, does not automatically have effect in the Dominican Republic. For a potential limitation to exist in the Dominican market, it must be verified whether the invention is protected by a patent currently in force in the country or whether there is a pending local application with the potential to generate relevant rights.
In the Dominican Republic, the protection of inventions is governed primarily by Law No. 20-00 on Industrial Property, its amendments, and its Implementing Regulations. ONAPI states that the owner of a patent may decide who is authorized to use the invention during its period of protection and may grant licenses to third parties.
Therefore, an FTO must be defined by considering, at a minimum, three variables:
What product, process, or service is intended to be exploited.
Where it will be manufactured, used, imported, or commercialized.
When each of those activities is expected to take place.
A company that manufactures in one country, imports components from another, and commercializes in several markets will need to evaluate each territory involved. Freedom to operate in one country cannot automatically be extrapolated to the others.
How is an FTO study conducted?
1. Definition of the product and the business model
The first step consists of describing with precision the solution intended to be exploited. It is not enough to indicate the general name of the product. It is necessary to identify its components, structure, composition, mechanism of operation, manufacturing process, indications, dosage, presentations, and other technically relevant characteristics.
The intended commercial activities must also be defined: research, manufacturing, outsourcing, importation, distribution, offering for sale, sale, or use.
2. Decomposition of the technology
The product or process is divided into its essential technical elements. In the pharmaceutical sector, for example, the analysis may include:
The active ingredient.
Salts, polymorphs, solvates, or crystalline forms.
The formulation and its excipients.
The manufacturing process.
The dose and administration regimen.
Therapeutic indications.
Drug delivery devices.
Combinations with other active ingredients.
Relevant methods of treatment.
This decomposition prevents an overly general investigation from overlooking secondary patents capable of fully or partially blocking commercialization.
3. Search for relevant patents and applications.
Structured searches are conducted in national and international databases using keywords, patent classifications, names of patent owners, inventors, patent families, and cited documents.
ONAPI maintains a list of patent databases, including WIPO’s PATENTSCOPE and LATIPAT. However, a global search must be supplemented by consulting the official files and registers of each relevant jurisdiction.
4. Analysis of the claims.
This is the legally decisive phase. The claims define the subject matter protected by the patent. Consequently, the presence of similar words or concepts in the title, abstract, or description of a document does not, by itself, demonstrate the existence of a conflict.
The analysis must determine whether all the elements of a potentially applicable claim are present in the product or process under evaluation, either literally or, where the applicable legislation allows it, through doctrines involving equivalent elements.
5. Verification of legal status
It must be verified whether the patent:
Was granted and remains in force.
Lapsed due to non-payment of annuities.
Expired due to the end of its term.
Was revoked, surrendered, or limited.
Is pending grant.
Is subject to opposition, invalidity proceedings, litigation, or amendment.
Has related divisional applications or continuation applications.
A technology disclosed in an expired patent may be in the public domain with respect to those claims; however, later improvements or specific embodiments may still remain protected.
6. Classification and risk assessment
The identified documents are classified according to their level of relevance and risk. The report must explain which patents could represent a limitation, what specific elements generate concern, in which territories, and during what period.
The result should not be reduced to a list of patents. It should provide an executive assessment that allows decision-makers to determine whether the project can proceed, whether adjustments are required, or whether it is necessary to negotiate rights with third parties.
What decisions may result from an FTO?
When a potentially blocking patent is identified, the company has several alternatives available:
Redesign the product or process.
A technical characteristic may be modified to prevent the solution from falling within the scope of the relevant claims. This strategy, known as a design-around, must be evaluated from legal, technical, and commercial perspectives.
Negotiate a license.
If the protected technology is indispensable, a license, assignment, collaboration, acquisition, or cross-license agreement may be negotiated with the patent owner.
Challenge the validity of the patent
Where legal and technical grounds exist, an invalidity action, opposition, third-party observations, or another mechanism available in the relevant jurisdiction may be considered. The existence of a granted patent does not necessarily mean that all of its claims are valid or enforceable.
Wait for the right to expire
In certain projects, the launch date may be coordinated with the expiration of the relevant patents. This alternative requires careful review of possible extensions, supplementary protection mechanisms, regulatory exclusivities, or other mechanisms applicable depending on the country.
Reconsider the market or supply chain
The company may decide to manufacture or commercialize in territories where no relevant protection remains in force, provided that it also considers the risks associated with the importation, exportation, and transit of the product.
Particular importance of FTO in the pharmaceutical industry
In the pharmaceutical sector, the same medicine may be related to multiple layers of protection: patents covering the compound, formulations, crystalline forms, synthesis processes, combinations, indications, dosages, or devices.
In addition, freedom to operate in patent matters does not replace regulatory compliance. Marketing authorization and the absence of patent infringement are independent assessments. Obtaining regulatory approval does not amount to authorization to exploit patented technology.
This distinction is particularly important for generic drug laboratories, contract manufacturers, distributors, investors, and companies evaluating acquisitions or product launches.
When is it advisable to conduct the analysis?
An FTO should be initiated early enough for its results to influence product design and commercial strategy. Among the most relevant moments are:
Before committing significant investments in research and development.
Before selecting a final formulation or process.
Before building or contracting manufacturing capacity.
Before presenting a product to investors or potential partners.
Before entering into licensing, distribution, or technology transfer agreements.
Before applying for regulatory approvals.
Before importing or launching the product in a new market.
During acquisition, financing, or due diligence processes.
Conducting the analysis only when the product is ready to enter the market can turn a manageable risk into a costly crisis.
FTO as a business tool
A Freedom to Operate study does not completely eliminate the possibility of disputes. Pending applications may change during prosecution, additional documents may be published, and the interpretation of the claims may be subject to dispute.
For this reason, an FTO should be understood as a reasoned risk assessment based on the information available on a given date, not as an absolute guarantee of the absence of litigation.
Nevertheless, when conducted correctly, it provides concrete benefits:
It reduces the risk of infringement and business interruption.
It prevents investment in commercially blocked technologies.
It improves the negotiating position with patent owners.
It identifies licensing and collaboration opportunities.
It facilitates investment, financing, and acquisition processes.
It guides product design and market-entry strategies.
It allows the establishment of provisions and contingency plans.
Ultimately, an FTO transforms patent information into legal and commercial intelligence.
Conclusion
Technically successful innovation must also be legally exploitable. Before manufacturing, importing, or commercializing a new solution, companies must understand the landscape of rights within which they will operate and anticipate potential obstacles.
A timely FTO analysis allows companies to move from reaction to planning: identifying risks, evaluating alternatives, and making decisions with greater legal certainty. In highly competitive technological and pharmaceutical markets, this assessment is not an ancillary formality, but rather a central component of innovation and product launch strategy.
At LawyerIP.Com. Attorneys and Consultants, we advise companies, inventors, laboratories, and investors in the planning and execution of Freedom to Operate studies, claim analysis, risk assessment, development of alternative strategies, and license negotiations. Our approach integrates the legal, technical, and commercial dimensions necessary to turn intellectual property into an effective decision-making tool.